October 2008

The title above is BBC’s original… And without doubt, it’s a very good question now. I am curiously waiting for the consequences. Just read the clip below and begin speculating about the possibilities of a scary conspiracy.

Syria has said American troops carried out a raid inside Syria along the Iraqi border, killing eight people – if the claims are true then this will be the first military incursion by the US into Syrian territory from Iraq.

But its timing is curious, coming right at the end of the Bush administration’s period of office and at a moment when many of America’s European allies – like Britain and France – are trying to broaden their ties with Damascus.

Whatever the local military factors involved in this US operation, it would be unthinkable to imagine that an incursion into Syria would not require a policy decision at a high-level.

With the Bush administration on the way out, this US military incursion may represent something of a parting shot against the Syrians.

It’s clear that if Senator Barrack Obama were to win the White House, his key advisers are among the strongest advocates of engaging with the Damascus across a broad spectrum of issues.

Marx explained that capital was invariably over-extended in a boom and that in the crisis that followed a part of that capital was devalued, enabling the rest to return to profitability and to the process of accumulation and expansion. However, we are now to some extent in uncharted territory: a phase of monopoly-finance capital that is in many ways unprecedented.

Actually, I believe this is not a totally “uncharted territory” if we recall all the milestones in the history of capitalism; since the catastrophic possibilities, or at least, the unchangeable nature of the “engine” that the system has developed over centuries was more or less defined almost one hundred years ago by important thinkers. In the circumstances of the late eighteenth century, Marx could only imagine the rapid transformation of capital into something totally different at the next stage: A new form which is completely independent from the industrial production but having the ability to affect and even dominate it. Rudolf Hilferding clearly recognized the characteristics and tendency of this new structural change in the early twentieth century and named it simply the finance-capital – banking capital in money form, which was actually being transformed into industrial capital. A few years later, Lenin stated that “the supremacy of finance-capital over all other forms of capital meant the predominance of the rentier and of the financial oligarchy.”

While the mainstream media is too busy dealing with the detailed coverage of the huge earthquake at Wall Street and other international markets, a group of researchers from the United Nations completed a study on 120 major cities around the world which presents some disturbing conclusions. The picture is not very bright, the report suggests, with the growing inequality and wealth gap in the biggest urban areas of the world. John Vidal, environment editor of The Guardian, tries to draw our attention to the consequences of this situation, in his latest article.

High levels of inequality can lead to negative social, economic and political consequences that have a destabilizing effect on societies,” said the report. “[They] create social and political fractures that can develop into social unrest and insecurity.”

According to the annual State of the World’s cities report from UN-Habitat, race is one of the most important factors determining levels of inequality in the US and Canada.

This picture has nothing to do with the present economical collapse of the international finance-capital. Even if the things went completely alright for the financial lords without any serious fluctuation at the “credits market”, the majority of the people who live in the most urbanized parts of the world would feel the harsh impacts of the globally dominant economic system which was built upon inequality.

The report found that India was becoming more unequal as a direct result of economic liberalization and globalization, and that the most unequal cities were in South Africa and Namibia and Latin America. “The cumulative effect of unequal distribution [of wealth] has been a deep and lasting division between rich and poor. Trade liberalization did not bring about the expected benefits.”

Social unrest has always been the direct result of the deep economical inequalities at sharing the wealth, which brought the end of feudal monarchies some two hundred years ago. Beginning with the end of this decade, we can expect a widespread unrest, social and political clashes, or even civil wars around the world – perhaps at the heart of the global finance-capital, like America and West Europe.

The Neoliberalism ship badly stranded and the “wise guys” of the global financial elite are in a helpless manic-depressive situation. This picture was more or less foreseen by the thinkers of our age almost a century ago but the smart-ass “experts” of the post-war era were so over-confident that they thought they could keep the veins in hand even under the worst circumstances, by injecting the rules of a “financial religion” they called the “global capitalism.” The greed and the bigotry of the international finance-capital finally led the world economy to a total collapse – and alas, the worst is not over yet.

Walden Bello, a Foreign Policy In Focus columnist and professor of sociology at the University of the Philippines, analyzes the present situation thoroughly in a Q & A style. (I recommend the original article at the source site.)

We’re seeing the intensification of one of the central crises or contradictions of global capitalism: the crisis of overproduction, also known as overaccumulation or overcapacity.

In other words, capitalism has a tendency to build up tremendous productive capacity that outruns the population’s capacity to consume owing to social inequalities that limit popular purchasing power, thus eroding profitability.

Good old-fashioned greed certainly played a part. This is what Klaus Schwab, the organizer of the World Economic Forum, the yearly global elite jamboree in the Swiss Alps, meant when he said in an interview earlier this year: “We have to pay for the sins of the past.”

Was this a case of Wall Street outsmarting itself?

Definitely. Financial speculators outsmarted themselves by creating more and more complex financial contracts like derivatives that would securitize and make money from all forms of risk — including such exotic futures instruments as “credit default swaps” that enable investors to bet on the odds that the banks’ own corporate borrowers would not be able to pay their debts

Was it lack of regulation?

Yes. Everyone acknowledges by now that Wall Street’s capacity to innovate and turn out more and more sophisticated financial instruments had run far ahead of government’s regulatory capability

Like this:

A worth-to-read-these-days article from MRZine, based on a lecture which Rick Kuhn, Reader in Political Science at the ANU, will deliver in London on 7 November. Kuhn presents a solid panoramic view of the recurrent crisis of capitalism and analyzes the “chaotic essence” of the dominant economic system which is “destined” to collapse totally in this century and transform into a new, “hybrid thing”. The below clip includes the few paragraphes that I picked but the entire article is highly recommended. A good read indeed.

Don’t panic! That’s the panicked cry of governments and central bankers around the world. Meanwhile their behaviour shows that they expect a very, very deep recession.

More ‘transparency’ and better regulation of banking won’t deal with the underlying issue which is low average rates of profit across the global economy.

Capitalism has a tendency to break down that is expressed in deep crises like the current one. Grossman argued that

capitalist production is characterized by insoluble conflicts. Irremediable systemic convulsions necessarily arise . . . from the immanent contradiction between value and use value, between profitability and productivity, between limited possibilities for valorisation and the unlimited development of the productive forces.

The fact that production is organised not to satisfy human needs but to make profits for the capitalist class is the ultimate cause of the system’s recurrent crises.

The below clip is from The Guardian, reporting the recent “sale boom” of Karl Marx‘s works in Germany. Especially, Das Kapital. The news story tells that young and well-educated Europeans turn to Marx again, after seeing the recent financial disaster and its global consequences. Say goodbye to Neoliberalism, pals… But you had been told about this more than a century ago – not to mention V. I. Lenin‘s later contributions in early 1910’s, with his masterwork on finance-capital and imperialism, largely based on Hilferding‘s analysis.

Karl Marx is back. That, at least, is the verdict of publishers and bookshops in Germany who say that his works are flying off the shelves.

The rise in his popularity has of course, been put down to the current economic crisis. “Marx is in fashion again,” said Jörn Schütrumpf, manager of the Berlin publishing house Karl- Dietz which publishes the works of Marx and Engels in German. “We’re seeing a very distinct increase in demand for his books, a demand which we expect to rise even more steeply before the year’s end.”

Most popular is the first volume of his signature work, Das Kapital. According to Schütrumpf, readers are typically “those of a young academic generation, who have come to recognise that the neoliberal promises of happiness have not proved to be true.”